NEWS

The Madison Square Garden Company Reports Fiscal 2017 First Quarter Results

New York, NY (November 4, 2016) - The Madison Square Garden Company (NYSE:MSG) today reported financial results for the first quarter ended September 30, 2016.

On September 30, 2015, The Madison Square Garden Company completed its spin-off from MSG Networks Inc.  The fiscal 2017 first quarter reflects the Company's financial results on a standalone basis, including the Company's actual corporate general and administrative costs.

Reported results for the fiscal 2016 first quarter are presented as the combined results of the sports and entertainment businesses, which, prior to the completion of the spin-off, had been consolidated with MSG Networks Inc.  Please note that results for the fiscal 2016 first quarter reflect the allocation of corporate general and administrative costs based on accounting requirements for the preparation of carve-out financial statements.  As a result, fiscal 2016 first quarter results do not reflect all of the actual expenses that the Company would have incurred had it been a standalone public company for that quarter.  Had The Madison Square Garden Company operated as a standalone public company for the fiscal 2016 first quarter, the Company estimates that these expenses would have been higher by approximately $10 million.

On a reported basis for the fiscal 2017 first quarter, the Company generated revenues of $181.7 million, operating loss of $32.8 million, and adjusted operating income of $1.6 million.

President and CEO David O'Connor said, "As we enter our second year as a standalone live sports and entertainment company, we remain focused on delivering the very best in premium live experiences for our customers and partners.  In our first quarter, we saw continued evidence that this approach - along with the important steps we took last year to position the Company for growth - is generating positive results.  Looking ahead, we remain confident that our efforts will position the Company for attractive long-term growth and asset value creation for our shareholders."

MSG Entertainment
For the fiscal 2017 first quarter as compared to the prior year period, MSG Entertainment revenues of $110.7 million increased 44%.  The increase was primarily due to higher overall event-related revenues at the Company's venues (led by The Garden and the Forum) and, to a lesser extent, revenues from the New York Spectacular Starring The Radio City Rockettes production.  The increase in revenues from the New York Spectacular Starring the Radio City Rockettes production was driven by 56 scheduled performances presented in the current year period as compared to no scheduled performances in the prior year period.  This was a result of the Company's decision to shift the timing of the production's run from the spring to the summer.

Fiscal 2017 first quarter operating loss of $7.3 million increased by $6.9 million as compared to the prior year period and adjusted operating income decreased from $3.1 million in the prior year period to an adjusted operating loss of $1.1 million.  The increase in operating loss and decrease in adjusted operating income as compared to the prior year period primarily reflects higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses, largely offset by the increase in revenues.

The increase in direct operating expenses primarily reflects higher expenses for the New York Spectacular Starring The Radio City Rockettes production due to the shift in the timing of the production's run and higher event-related expenses at the Company's venues, slightly offset by lower venue operating costs.  The increase in selling, general and administrative expenses primarily reflects higher corporate general and administrative costs, employee compensation and related benefits and professional fees.  As noted above, selling, general and administrative expenses in the prior year first quarter do not include all of the actual expenses that the Company would have incurred had it been a standalone public company for that period.

MSG Sports
For the fiscal 2017 first quarter as compared to the prior year period, MSG Sports revenues of $71.0 million decreased 3%.  The decrease in revenues was primarily due to lower professional sports teams' pre/regular season ticket-related revenue and food, beverage and merchandise sales (both primarily due to one fewer Rangers pre-season game and two fewer Liberty regular season games versus the prior year period).  This decrease was partially offset by higher suite rental fee revenue, ad sales commission and professional sports teams' sponsorship and signage revenues, and local media rights fees from MSG Networks Inc.

First quarter operating income decreased by $10.7 million to $9.3 million and adjusted operating income decreased by $9.0 million to $15.4 million.  The decrease in operating income and adjusted operating income primarily reflects higher direct operating expenses and selling, general and administrative expenses, and the decrease in revenues.

The increase in direct operating expenses was primarily due to a $5 million provision for a team personnel transaction and higher net provisions for NBA and NHL revenue sharing expense, partially offset by lower other team operating expenses, team personnel compensation and expenses associated with professional sports teams' food, beverage and merchandise sales.  The increase in selling, general and administrative expenses was primarily due to higher employee compensation and related benefits, costs associated with the new advertising sales representation agreement with MSG Networks Inc., and corporate general and administrative costs, slightly offset by lower marketing and other expenses.  As noted above, selling, general and administrative expenses in the prior year first quarter do not include all of the actual expenses that the Company would have incurred had it been a standalone public company for that period.

Other
For the fiscal 2017 first quarter, Other operating loss of $34.9 million and adjusted operating loss of $12.7 million increased by $10.7 million and $9.0 million, respectively, primarily due to an increase in employee compensation and related benefits, the Company being subject to New York State and City capital tax in the fiscal 2017 first quarter and higher professional fees.  As noted above, selling, general and administrative expenses in the prior year first quarter do not include all of the actual expenses that the Company would have incurred had it been a standalone public company for that period.

 

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About The Madison Square Garden Company

The Madison Square Garden Company (MSG) is a world leader in live sports and entertainment that presents or hosts a broad array of world-class events - including concerts, sporting events, family shows and special events - in an unparalleled mix of celebrated venues that span four of the nation's largest entertainment markets. Those venues are: New York's Madison Square Garden, The Theater at Madison Square Garden, Radio City Music Hall and Beacon Theatre; the Forum in Inglewood, CA; The Chicago Theatre; and the Wang Theatre in Boston.  In addition, MSG has a diverse collection of properties that includes some of the most widely-recognized sports franchises: the New York Knicks (NBA), the New York Rangers (NHL) and the New York Liberty (WNBA), along with two development league teams -- the Westchester Knicks (NBADL) and the Hartford Wolf Pack (AHL).  The Company also features popular original entertainment productions -- the Christmas Spectacular and New York Spectacular - both starring the Radio City Rockettes, and through Boston Calling Events, produces outdoor festivals, including New England's premier Boston Calling Music Festival.   More information is available at www.themadisonsquaregardencompany.com.

 

 

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